From The Desk Of

Kamran Abdul Salam

Topic:
Chapter 10:

Human Resource
Management
HRM is also a strategic and comprehensive approach to managing people and the
workplace culture and environment. Effective HRM enables employees to contribute
effectively and productively to the overall company direction and the accomplishment
of the organization's goals and objectives. HRM departments, unlike the conventional
personnel departments are responsible for overall improvement of the staff and thus
also consider their presence vitally important for the business to enable it gain a
competitive advantage.

Personnel departments used to look into the disciplinary affairs, the specific role of HRM
is to improve efficiencies, flexibilities and motivation of the workforce.

ROLES/FUNCTIONS OF HRM:
1. Manpower planning (workforce planning)
WFP includes determining the NUMBER and SKILLS of required workforce in future which
depends on

(a) Market, external factors, competitor’s actions, consumers tastes

(b) Business objectives: Expansion and customer service
(c) Productivity level of new machinery
(d) Government legislations Minimum wage

Working hours

(e) People nearing retirement

(f) Increased work load

2. Recruitment & Selection

A. Vacancy exists

B. Job Analysis Job Description

 Job title
 Areas of responsibility
 Whom the person is accountable
 Limitations of authority
 Resources available
Person Specification
 Qualification
 Age
 Experience
 Skills
C. Attracting Applicants
INTERNALLY OR EXTERNALLY

News bulletin Newspaper

Notice Boards Recruitment agencies

Management Job Centers

Unsolicited letters

SELECTION
D. tests (not always the case)

E. Short listing of candidates passed

F. Interviews

G. Offer and Acceptance

H. Introduction Training

3. Training
 Induction
 On the job
 Off the job
4. Development & Appraisal
 Development takes place in the form of new challenges and opportunities
 Additional tasks, training courses to learn new skills
 Promotion with more delegation
 Job enrichment

5. Appraisal
Finding out of the qualities, usefulness & worth of employees How? By comparing actual
performance with targeted Why?

 To improve performance
 To identify training needs
 To increase motivation
 To assess the effectiveness of the recruitment process
 To avoid salary increase

6. Development appropriate pay scales

Hourly rate, Piece rate, PRP, Bonus, Commissions

Evaluation of different pay scales for different jobs and an objectives comparison of
demands of each job – JOB EVALUATION

7. Measuring and Monitoring Staff

(i) Labor productivity Output/year
Avg. No of workers employed

(ii) Absenteeism% = No of staff absent x 100

Total No of staff

(iii) Labor Turnover = No of staff leaving in year x 100

Avg. no of staff employed

8. Involving other managers in staff development.

Recruitment
Refers to all HR activities that are aimed at finding and attracting job candidates who
have the necessary knowledge, experience, qualifications and skills to fill a job. It
involves identifying the need for an employee, devising a job description and finding a
person suitable to fulfill the needs of the job.

Reasons why businesses need to recruit people

 To replace those who were dismissed
 To replace employees who resigns or who have passed away
 New employees for expansion
 Employees who are promoted
 Employees who retire

Types of recruitment
Internal Recruitment: occurs when in-house employees are promoted.
Advantages of internal recruitment

 Saves time and money

 The candidate’s reliability, ability and potential are already known.
 The candidate already know the expectations and rules of the company
 Motivate other employees to work harder to get promoted too

Disadvantages of internal recruitment

 No new ideas or experience come into the business

 May create jealousy and rivalry between existing employees
 Can cause line management problems for the promoted person if they now
supervise former colleagues

External Recruitment
Finding and attracting job candidates from outside the organisation. Most vacancies
are filled with external recruitment, which always involve advertising the vacancy.
Some of the suitable media of advertising include:

 Local news paper

 National news paper
 Recruitment agencies
 Government job centres
 Internet
External recruitment also involves headhunting. Headhunting takes place when people
who are already employed by one employer are asked to apply for a job at another
employer

Advantages of external recruitment

 New ideas and skills are brought into the business

 Can prevent conflicts among existing employees
 Chances of attracting the best candidate are high

Disadvantages of external recruitment

 It is time consuming
 It is very expensive e.g advertising costs and interview expenses
 Demotivate existing staff. Internal applicants might be unhappy that a stranger
has got the job.

Recruitment Agencies
Most agencies keep record of candidates’ CVs and they are able to make a
recommendation quickly. Recruitment agencies usually know a business’s needs. Time
is saved as the agency works through applicant’s CVs.

Recruitment Procedure
Step no.1: Determine the exact labour needs of the enterprise
The business must carry out job analysis. Job analysis involves determining the exact
labour needs of an enterprise before candidates can be attracted. Job analysis
involves coming up with the job description and job specification.

Job Description

Refers to a written description of the job and its requirements. Provide details as to what
task will the person be expected to undertake.

It includes details such as:

 Job tittle
 Main purpose of the job
 Duties and responsibilities
 Department in which the job is performed
 Pay scale
ADVANTAGES OF PRODUCING A JOB DESCRIPTION

• Provides a clear idea of what a job involves so they can select the best
candidate
• Saves time / money / makes selection easier and the business won’t get
applications from people who cannot do the job
• As a basis for drawing up a contract and the business can be sure that all duties
will be carried out on-board
• Helps decide basis for pay
• Help create person specification
• Helps create appropriate job advert
• Helps resolve disputes between managers and subordinates

Job specification

Refers to a written description of the characteristic and qualification required of the

person that will fill the job. It is a person profile which will help in the selection process by
eliminating applicants who do not match up to the necessary requirements. It includes
details such as:

• Qualifications required
• Training required
• Minimum experience required
• Physical requirements

Step no.2: Choose the recruitment Source

Decide on whether to use external or internal recruitment method

Step no.3: Prepare a job advertisement

This is what a business needs to decide on when drawing up an job advert

• What should be included i.e job description and job specification

• Where the advert will be placed i.e newspapers, internet, notice boards etc
• Costs associated with the advertising media

Headings to be included in a job Advert

• Job tittle
• Job location
• Essential skills, qualifications and personal qualities
• Brief outline of the job responsibilities
• Pay scale
• How to apply (Curriculum Vitae (CVs), telephone call or online etc)
• Who to apply to (to the business itself or it might be through an agency)
• Deadline for the submission of applications
Step no.4 Selection It is known as shortlisting.
It refers to the process of determining which applicants will best suit which specific jobs.
Selecting them basing on certain assessment criteria (screen responses). The CVs of
unsuccessful candidates can be kept for future references. Draw up a short list of
candidates. Come up with a short list of potential candidates, usually a list of 5
candidates

Step no.5: provide feedback to candidates

Inform all applicants about the outcome of their applications so that unsuccessful
candidates can look for other employment options. Invite suitable candidates for
interviews.

Step no.6: Employment Interviews

An interview is a conversation between a job candidate and the relevant managers of
a business enterprise. It is used for selecting the best candidate from the short list.
Interviews aim to determine if candidates are suitable for a job by comparing the
candidate’s skills, experience, qualifications with the job requirements.

Workforce Planning
It is also known as manpower planning. It involves the analysis and forecasting the
number of workers and skills of those workers that will be required by the organisation to
achieve its objectives. Thus, it involves forecasting the future demand for labour in the
organisation and planning to meet it. It is accomplished through analysis of internal
factors such as current and expected skills needs, vacancies and departmental
expansions and reductions as well as external factors such as the labour market
conditions. Workforce planning also involves a skills audit (Workforce audit). Workforce
audit involves an assessment of staff capabilities and matching them against future
needs. This is just a check on the skills and qualifications of all existing workers and
managers. The HR manager will be checking on social, intellectual, technical,
managerial and administration skills.

Benefits of Workforce planning

 Planning for the future i.e to calculate the future staffing needs of the business
 To prevent the problems of too few or too many staff at the business
 To avoid many staff with wrong skills
 To achieve the objectives of the business in the future
Factors influencing the number employees required in the future

 Future demand for the firm’s product

 Productivity of existing staff
 The objectives of the business i.e growth objective will imply that more staff will
be required.
 Labour legislations i.e minimum wage laws from government encourages firms to
workers with machines
 Labour turnover i.e the higher the rate at which staff leave the business, then the
greater will be the firm’s need to recruit replacement staff.
 Skills of existing staff i.e HR managers have insatiable appetite for better-qualified
employees

Labour Turnover
Measures the rate at which employees are leaving an organisation. It is measured using
the following formula

Labor Turnover = No of staff leaving in 1 year x 100

Avg. no of staff employed

Example: ABC limited employees 500 employees on average in 2014. 50 workers left the
business during 2014.

Labour turnover = 50 workers x 100 = 500 workers

Interpretation: labour turnover is increasing or is too high then it will be a signal that:

Employees are not happy i.e low morale

The business failing to recruit the right people

Bad leadership or management

Availability of better paid jobs elsewhere

Potential benefits of high labour turnover

 Low-skilled and less productive staff might be leaving and creating space for
highly skilled workers
 New ideas and practices are brought into the business by new workers
 Can benefit the business with the plans of reducing staff size i.e staff that will be
leaving won’t be replaced
Problems of high labour turnover

 High costs of recruiting, selecting and training new staff

 Difficult to establish team spirit as team members are constantly changing
 Low output level when a new worker is introduced and, or when the business is in
the process of finding a suitable replacement.
 Lose of customers

Employment contract:
It is a loyal binding between an employer and employee which determine the terms
and condition with the regarding job.

Following contents are mentioned in an employment contract:

 Areas of responsibilities
 Working hours and days
 The rate of pay
 Total salary
 Entitlement for holidays
 Vocational policies
 Conditions to quit the job (either from employer or employee)
 Overtime rate
 The health and safety conditions

Staff Redundancies
Redundancy can happen if a job than someone has been doing is no longer required
and there is no possibility of any person beings re-employed somewhere else in the
organization. Redundancy may also happen if due to budget cuts, the firm needs to
reduce its workforce. If redundancy is to take place, then set guidelines are normally
followed to ensure that the correct person or people are made redundant. This may
happen due to many reasons:

 A merger between two firms results in surplus job.

 A business is losing sales and wants to cut the production level or cost and may
lay off employees
 The product is taken out of production altogether
 Maybe new machinery is introduced and it requires different skills and
qualifications to operate it. It is also known as retrenchment.
Staff Dismissal
Dismissal means when a worker is told to leave the job because of his unsatisfactory
behavior or he has repeatedly failed to carry out his duties. Dismissal can be fair or
unfair

To show that a dismissal is fair employer need to be able to show that one of the
following is true and, except in the case of gross misconduct, that the agreed
procedures have been followed:

 Inability to the job in a situation where necessary and after sufficient training has
been given:
 A continuous negative attitude at work, which has badly affected the employees
or their work:
 Continuous disregard of required health and safety procedures.
 Deliberate destruction of an employer’s property.
 Continued bulling of other employees.
 There are certain situation situations in which dismissal has been considered unfair
or in breach of employment law. These include:
 Pregnancy
 A discriminatory reason, e.g. the race, color or religion of a worker.
 Being a member of a union.
 A non – relevant criminal record: if the employer has previously been unaware of
a criminal record, it is not a reason for dismissal unless it is central to the job, e.g.
a cashier convicted of child abuse.

Employee Welfare
Employee welfare means the efforts to make life worth living for workmen. It is a
comprehensive term including various services, facilities and amenities provided to
employees for their betterment. It helps to improve the loyalty and morale of the
employees and it reduces labor turnover and absenteeism.

Employee Morale: refers to the feeling of enthusiasm and loyalty that a person has
about a task or job. Employees must feel that what they are doing is worthwhile. If they
feel that their work is valued by management, they are also likely to feel that they are
valued both as employees and as individuals. Their morale will be high and employees
tend to have a greater commitment and loyalty to their work.

Employee Welfare: refers to the state of being happy, healthy or successful.

Employees are often concerned about their health and safety at work. A business
organisation which cuts corners on welfare is unlikely to get the best from its employees.

Ways to maintain or improve staff morale and welfare

  Ensure that health and safety guidelines/ legislation is met. The physical welfare
of employees can partly be assured by following health and safety measure.
 Offering help and guidance to employees who might be experiencing problems
in their life outside work. E.g when a worker is worrying about her child’s
deteriorating health condition.
 Provide medical facilities within the business in order for the employees to get
treatment for any injuries.
 Dealing with issues that are demotivating employees
 Treating employees fairly

Work-life Balance
Refers to a situation in which employees are able to give the right amount of time and
effort to work and to their personal life outside work. Employees must have enough time
to attend to their private life. Thus employees must get time to spend with their loved
ones. Working long hours and also denying employees breaks can lead to stress and
poor health. The management must assist employees to achieve a better work-life
balance. The aim is to maintain a sensible balance that allows career and ambition
needs to meet as well as family and friendship needs and commitments.

Methods that can be used to achieve a better work-life balance

 Flexible working i.e allowing some employees to come at busy periods of the day
but not during slower periods
 Teleworking i.e working from home for some of the working week
 Job sharing i.e allowing two people to fill one full-time job, although each worker
will only receive a proportion of the full-time pay

Policies of Diversity and Equality

Equality Policy
Refers to practices and processes aimed at achieving a fair organisation where
everyone is treated in the same way. People have the right to be treated with equality,
respect and dignity. All employees must have equal opportunities. Equality policy is
violated when some employees are discriminated against e.g denying some
employees an opportunity to receive skills training.

Benefits of promoting Equality

 Can improve employee morale

 Greater commitment and effort from employees
 The business can easily attract skilled and experienced personnel from other
organisations
Diversity Policy
Diversity refers to variety or mixture. Diversity policy refers to practices and processes
aimed at creating a mixed workforce and placing positive value on diversity in the
workplace. Diversity promotes inclusivity

Diversified workforce include employees:

 Who come from different backgrounds and cultures

 Who speak different languages
 With different levels of education
 Who differ in terms of age and gender

Advantages of Diversity in business

 Creativity increases when diverse team members work together

 When a diverse team pulls together by focusing on their strengths, increased
levels of productivity will be achieved
 Colleagues learn to value and respect one another even if they do not hold
similar values and beliefs
 A diverse workforce brings different skills to the workforce, for example language
skills
 Can lead to an increase in the customer base since some customers are
attracted by a diversified sales force.

The costs may include:

 higher recruitment costs

 longer recruitment process
 greater training needs
 communication barriers.

Training and development

Training and development can help employees to improve their performance at work.
Employees who are offered opportunities for training and development are often more
motivated. In the next chapter we will look at some of the motivational theories that
explain this relationship.

Businesses that offer good-quality training and development often have very loyal
workforces, and it can help to develop a reputation as a ‘good’ employer.
Improvements in the performance of a business’ labour force can assist the
organisation in achieving its objectives. Training and other development activities can
result in higher levels of productivity or fewer faulty products. Both factors can help
businesses to reduce their costs.
Development is a broader term than training and refers to a wider range of activities
intended to improve employee performance at work. It includes attendance on
courses studied at colleges and universities, performance tracking and improvement,
coaching and mentoring, as well as training.

Types of training
Almost all employees receive training at some point during their working lives and this
training comes in different forms.

Induction training
Employees may receive training when commencing a new job. This is known as
induction training and is intended to introduce an employee to the business. Induction
training may provide employees with information on the following:

» important policies such as health and safety, and disciplinary procedures

» the layout of the factory or office

» their new colleagues

» the basic duties of the job. Induction training enables a new recruit to become more
productive quickly. It can prevent costly errors resulting from employee ignorance and
can make a new employee feel welcome, thereby reducing labour turnover

Off-the-job training
This involves training outside the workplace, at a college, university or some other
training agency. Off-the-job training can take the form of a range of activities in which
job-related skills and knowledge are acquired. These activities can include external
courses such as lectures and seminars, self-study or open learning.

On-the-job training
This form of training does not require the employee to leave the workplace. They learn
from experienced employees through observation and work shadowing. The trainee
may work through instruction manuals or receive guidance from senior employees.
The impact of training and development
Positive
• It can improve employee performance, and hence the competitive position of
the business, by developing new skills and knowledge.
• Training and development should improve employee morale and productivity.
• Training and development are core components of HRM and assist organisations
in having the right workforce to achieve strategic objectives.
• A reputation for training and developing employees will assist businesses in
attracting and retaining highquality, creative and productive employees.

Negative
• Training and development activities use up valuable resources that could be
utilised elsewhere in the organisation.
• Attendance at training and development activities may mean that employees
are unavailable to the organisation for a period of time. Production may suffer as
a consequence.
• Employees, once trained, may leave for other, possibly better paid jobs.
• The beneficial effects of these activities may vary because some managers
might seek to avoid training and developing their staff as it can lessen the degree
of control they have over their subordinates.

The impact of training and development of employees is potentially greater if the

market in which the firm operates is subject to fierce competition. For example, firms
may operate extensive development activities in an attempt to improve rates of
creativity and/or productivity to gain an advantage over competitors. Businesses
manufacturing motor vehicles have tended to invest more heavily in such activities
over recent years for these reasons. When products are similar, price is often a very
important factor influencing consumers’ buying decisions. In such circumstances,
minimising costs (and prices) is vital. A key part of this is making sure that labour is as
productive as possible.

An emphasis on training and development may have an impact on the management

style used in the business. Managers who engage in large-scale development and
training activities will be more likely to value techniques such as delegation and
teamworking. Partly, this is a question of philosophy: democratic and communicative
managers are more likely to value employees and therefore will aim to develop them
as much as possible.
Development and appraisal of employees
This should be a continuous process. Development might take the form of new
challenges and opportunities, additional training courses to learn new skills, promotion
with additional delegated authority and chances for job enrichment. To enable a
worker to continually achieve a sense of selffulfilment, the HR department should work
closely with the worker’s functional department to establish a career plan that the
individual feels is relevant and realistic. The HR department should analyse the likely
future needs of the business when establishing the development plan for each member
of the workforce. In this way, an individual’s progress and improvement can also be
geared to the needs of the company.

Employee development to encourage

intrapreneurship
Intrapreneurship
Entrepreneurs are individuals who take risks to develop business ideas and start their
own businesses. Some larger organisations attempt to encourage entrepreneurial
approaches among their employees to improve the organisation’s performance. This is
termed intrapreneurship. Such organisations encourage individuals to develop ideas for
new products or ways of producing goods and services within their own departments or
sections of the business. In effect, employees are supported to behave as
entrepreneurs within a large business. One well-known example of successful
intrapreneurship is Spencer Silver, who developed the Post-It note while working at 3M,
an American multinational company. He was a chemist who developed the glue used
in Post-It notes. His innovative type of glue was strong enough to hold papers together,
but easily pulled apart without tearing the documents. It could also be used
repeatedly.

Employees cannot simply be expected to become intrapreneurs overnight. A range of

learning and development activities are required to prepare employees to fulfil the role
of an intrapreneur successfully.

» Personal skills - Intrapreneurs need many of the strengths associated with

entrepreneurs. They should be creative, confident and pursue their ideas with
persistence. They should be good at solving problems and willing to take calculated
risks. Thus, they need to be able to analyse risk to avoid making damaging decisions.
» Technical skills - Successful intrapreneurs must be able to analyse markets,
organisations and consumer behaviour to uncover problems. These may take the form
of unfulfilled or unrecognised needs or production bottlenecks. Intrapreneurs then
apply a range of skills to solve these ‘problems’. Developing the knowledge and skills to
undertake this analysis and subsequent problem-solving are central to success as an
intrapreneur.

» Senior employees - The learning and development activities are not limited just to
employees engaged in intrapreneurial activities. It is important that managers and
leaders also have the intrapreneurial spirit and that this exists throughout the
organisation. They should encourage risk-taking, innovative activities and ensure
sufficient resources (human and non-human) are provided.

The need for learning and development activities in an intrapreneurial organisation will
be continuous as markets, products, technology and consumer needs change over
time. In addition, labour turnover will mean that new employees are recruited who lack
the necessary skills to operate as effective intrapreneurs. Learning and development
activities will be needed throughout the careers of intrapreneurs.

Management and workforce relations

Co-operation between management and the workforce can reduce the number of
disputes that may occur between the two sides. Disputes can result in strikes (where
workers withdraw their labour) or other measures, such as banning overtime working.

The benefits of co-operation between management and the workforce

One way of considering how co-operation between management and the workforce
benefits both parties is to consider the costs that may arise from any sort of dispute.

Cost for Employers

• The business may lose revenue from selling its products if the dispute results in
industrial action, such as a strike, and production is halted.
• The business may lose future sales if its customers believe that it is an unreliable
supplier.
• The business’ relationship with its employees may be damaged in the long term,
with negative implications for morale and productivity.
• The business may be regarded as a more risky investment and may encounter
more difficulty in raising finance, or it may be expected to pay higher interest
rates for loans
• The business’ image may be damaged if it is involved in a dispute with its
employees and this may result in the loss of some of its customers.
Cost for Employees
• Employees may lose pay if the industrial dispute takes the form of a strike.
• The dispute may weaken the employer’s finances, putting employees’ job
security at risk.
• A financially weakened employer may not be able or willing to pay for training
and development for employees, denying them the chance to improve and
update their skills and knowledge.
• The employer may respond to the threat of, or actual, industrial action by
replacing people with technology in the production process or by moving
overseas.

The benefits to employers

Employers benefit in a range of ways from co-operation with employees.

» Helping to develop a strong employer brand Employers who avoid disputes with
employees and who have effective mechanisms to resolve any disputes quickly will be
viewed more favourably by potential employees. This will assist them in attracting more
able and productive employees.

» Enhancing employee morale Having a workforce with high morale is a valuable asset
for any business. Poor employer relations are likely to lead to employees believing they
are not valued and will reduce their sense of well-being and morale. Such factors can
damage employee performance severely.

» Improving the business’ corporate image Avoiding disputes or settling them quickly
helps a business to develop or maintain a reputation as a fair and reasonable
employer. This can have positive effects on a range of stakeholders, including
customers and investors.

» Strengthening competitiveness Good employer– employee relations can be a

powerful competitive weapon. They can reduce costs by eliminating lost production,
adding to a business’ reliability as a supplier as its production is not interrupted, and can
enhance labour productivity (thereby lowering labour costs), as workers are motivated
by what they regard as fair pay and working conditions
The benefits to employees

Equally there are a number of advantages to employees from the maintenance of

good relations with their employers.

» Financial benefits Employees avoid loss of pay during periods of industrial disputes if
good relations are maintained. However, because the employer may also be
financially stronger as a result of avoiding wasteful disputes, there is a greater possibility
of future improvements in pay and conditions.

» Job security An employer is less likely to consider replacing employees with

technology or moving overseas to locations where industrial action rarely or never
occurs.

» The possibility of greater participation in decision making Involving employees in

decision-making is one way of helping to maintain good relations, but it is also a
possible benefit to employees from doing their part in maintaining a positive
relationship. Where amicable relationships exist, employers may be more willing to offer
opportunities for employee involvement in decision-making.

The impact on employers and employees of trade union involvement in the

workplace

Most trade unions across the world have similar objectives. These focus on improving
the economic position of their members by fulfilling the following objectives.

» Maximising pay Trade unions engage in collective bargaining to provide their

members with the highest possible rates of pay.

» Achieving safe and secure working conditions Unions often provide training for safety
representatives who can advise employers on health and safety issues. Creating a
workplace in which there is a focus on health and well-being can be an important
factor in creating employee engagement.

» Attaining job security Arguably this is the most important objective of a modern trade
union, and it is one that is difficult to fulfil in the light of pressures resulting from
globalisation and the increasing use of technology in the workplace.

» Participating in and influencing decisions in the workplace Trade unions may achieve
this through collective bargaining or through having representatives on any employer–
employee committees. Trade unions may play a role in decisions ranging from a
change in fringe benefits, such as free lunches, to the closure of one or more parts of
the business.
TRADE UNION
An organisation of working people with the objective of improving the pay and working
conditions of their members and providing them with support and legal services.
Alternatively it can be defined as a group of workers who join together to protect their
interests and work for better wages and working conditions. It is a type of pressure
group.

Relationship between Trade Union and HRM

A Trade Union works on behalf of its members to ensure that the rights of employees are
satisfied while in employment. Trade union representatives will meet with
representatives of any business to discuss issues related to trade union members
employed by the business. This relationship can be beneficial to both parties

Why do workers join trade unions?

Workers might join a trade union because

• They believe that there is strength in number and they will be listened to when
they are in a group.
• To negotiate a better pay, more holidays and less hours of work.
• To pressurise the employer to provide them with a healthier and safer working
environment.
• Improved benefits for retrenched workers
• To get the benefits of advice, financial support and welfare activities carried out
by Trade Unions.
• Many workers may also join a trade union because there is a closed shop policy.

Benefits of Trade unions to employer

• Trade unions usually intervenes to ensure that its members respect the
employment laws
• Employers will discuss issues with a representative from a trade union rather than
discussing the same issues with numerous employees
• A trade union can be asked to explain to the employees that their actions are
not lawful and that they must return to work
• Trade union can encourage its members to further their education and the
business will benefit from increased productivity
Benefits of Trade union to employees
• Employees have someone who can negotiate with employers on their behalf.
These representatives are more experienced in negotiating than the average
individual employee
• Employees will be protected from illegal dismissal
• Members will get up-to-date information about employment legislation that
applies in the country
• Improvement in wages and working conditions
• Financial support at favourable rates
• Protection from unfair discrimination

Collective Bargaining
The process of negotiating the terms of employment between an employer and a
group of workers who are usually represented by a trade union official. It means that
the needs and demands of a group of employees will be discussed, by the
management and the representatives of a trade union, for the workforce as a whole
rather than on an individual basis

Closed Shop
It is where all employees must be a member of the same trade union.

Single Union agreement

It is an agreement between the management and workers, where the management
deals with only one trade union and no other.

No-Strike Agreement
Unions agree to sign a no strike agreement with employers in exchange for greater
involvement in decisions that affect the workforce.

Productivity agreement
It is an agreement between the management and workers whereby the management
agrees to increase the benefits for workers in return for an increase in productivity.
Types of Industrial Actions
Industrial action refers to the measures taken by the workforce or trade union to put
pressure on management to settle an industrial dispute in favour of employees

• Strike: when employees refuse to work

• Picketing: When employees stand outside the workplace and prevent the
smooth functioning of the firm. E.g. they may stop the movement of Lorries in and
out of factory.
• Work to Rule: employees refuse to do any work outside the precise terms of the
employment contract.
• Go slow: It is when the employees work at a very slow pace.
• Non-cooperation: It involves workers refusing to follow a new procedure or rule.
• Overtime ban: It is when the employees refuse to work overtime or for additional
hours of work apart from their normal working hours.
• Lock out: occurs when striking workers prevents non striking workers from entering
the business premises
• Sit-in/ Sit down strike: employees report for duty but they just sit in their offices

Methods used by employers to influence the outcome of industrial dispute

• Threats of redundancies
• Changes of the employment contract
• Closure of the business
• Using public media to gain public support

Factors determining the strength of a Trade Union

• Most workers belong to one union

• All workers agree to take industrial action
• Industrial action costing the employer large sums of money
• Rate of inflation increasing
• Labour cost are a low proportion of total costs
• Demand for the product labour helps to produce is inelastic
• When productivity increases

Factor determining the strength of the employer

• Unemployment is high
• Profits are low
• Threats of relocation to low cost countries0
• Demand for the product is elastic
• When the rate of inflation fairly stable
• Productivity of workers didn’t change